In this paper we introduce a model of a society with two distinct linguistic groups, each consisting of heterogeneous individuals speaking their native language. There is also a world language so that every individual is faced with four learning choices: to study the other local language only,...

This chapter examines how cultural similarities (or differences) represented by common language roots affect economic activities. When individuals share some common linguistic repertoires, they are more inclined to develop commercial relationships and conduct business transactions than in the...